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Legislature passes state budget
June 19, 2012
On June 15, fulfilling a goal to eliminate the state's stubborn structural deficit, Democrats in the Senate and Assembly passed a balanced, on-time budget. Like the budgets of the previous two years, this year's budget included massive cuts in spending to all areas of government, while avoiding the severest cuts to those Californians, especially the newly-unemployed, who have suffered most during this global recession.
Throughout the budget process, Governor Brown laid out three clear requirements for the budget: 1) it must be a balanced budget for this fiscal year; 2) it must be a balanced budget for next year, and the year after that; and 3) it must be a budget that projects a surplus by 2016.
The budget contains a reserve of approximately $500 million in the coming Fiscal Year (FY), and it is projected to remain balanced for the next four fiscal years, with a projected operating surplus of more than $2 billion in FY 2015-16. It also avoids additional borrowing beyond that proposed by the Governor.
In short, the approved budget meets all of Governor Brown's requirements.
The Legislature's vote concluded five-months of budget review, with many public hearings held by both houses. Leadership of both houses and the Governor negotiated compromises on several key sticking points to ensure that the budget remained balanced in future "out years."
With a goal of achieving a balanced approach to long-term fiscal stability, Legislative Democrats continue to support the Governor's efforts to achieve voter-approved revenue that allows the state to maintain its investment in K-14 education and public safety programs. Voters will have a chance to approve that revenue in a November ballot initiative. If voters do not approve the revenue measure, the budget contains automatic trigger cuts in order to accommodate that lost revenue.